Issue Paper: Water Quality Certification Procedures for Klamath River Restoration Project

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1 Report Issue Paper: Water Quality Certification Procedures for Klamath River Restoration Project By: Steve Kirk and Debra Sturdevant March 2012 Last Updated: 3/14/12 DEQ 11-WQ-047

2 This report prepared by: Oregon Department of Environmental Quality 811 SW 6 th Avenue Portland, OR Contact: Steve Kirk (541) or Debra Sturdevant (503)

3 Draft Issue Paper: Klamath River Rulemaking Table of Contents Chapter 1. Introduction and Background... 1 Introduction... 1 Background... 1 Purpose and Need for Rulemaking... 1 Objectives... 2 Process... 2 Chapter 2. Approaches Used for Other Dam Removal Projects... 3 Chapter 3. Approaches Considered... 5 Introduction... 5 Compliance Schedule Options Use Existing Compliance Rules Amend Rules to Allow Compliance Schedule for Klamath Dam Removal 401 Certification... 6 Variance Rule Options Amend the Existing Variance Authorizing Rule Adopt a Water Body Variance or Temporary Standard... 8 Klamath-Specific Restoration Rule... 8 Chapter 4. Summary of Advisory Committee Discussion Technical Issues Policy Issues Chapter 5. Recommendation Summary of DEQ Recommendation Proposed Rule... 12

4 Draft Issue Paper: Klamath River Rulemaking 1 Chapter 1. Introduction and Background Introduction The Klamath Hydroelectric Settlement Agreement (KHSA), negotiated by Klamath River stakeholders includes the removal of the J.C. Boyle Dam. The Department of Environmental Quality is proposing a rule outlining policy and procedures for evaluating whether to certify the dam removal under section 401 of the Clean Water Act if an application is submitted. To certify the project, DEQ must be able to conclude that the project will comply with Oregon s water quality standards. This issue paper provides background information, discusses the basis and rationale for the proposed rule, and describes the process DEQ used to develop the proposed rule. Background The Secretary of Interior is anticipated to determine whether or not to remove the J.C. Boyle Dam in spring or summer If the determination is affirmative, the state has 60 days to concur. The KHSA states: each State shall consider, in its discretion and independent judgment, whether: (i) significant impacts identified in its environmental review can be avoided or mitigated as provided under state law; and (ii) Facilities Removal will be completed within the State Cost Cap. Dam removal activities often result in short-term degradation of water quality but provide longterm water quality and/or fish habitat improvements. In the Klamath River, dam removal is expected to result in the release of sediments with potential associated exceedances of water quality criteria, including dissolved oxygen, ph and turbidity for a limited time, according to the draft environmental impact statement prepared by the U.S. Department of Interior Bureau of Reclamation (September 2011). However, the proposed dam removal is expected to benefit water quality and cold-water fish, according to the draft environmental impact statement. If the project meets this objective, it would meet the Clean Water Act s goal to restore and maintain the chemical, physical, and biological integrity of the Nation's waters. Purpose and Need for Rulemaking The purpose of the proposed rule is to clarify DEQ s policy and procedures for evaluating whether or not to certify that the dam removal will comply with water quality standards. The Secretary of Interior will decide whether or not the J.C. Boyle dam should be removed as part of Klamath River restoration efforts. DEQ s current rules are not clear as to how DEQ would evaluate a project, such as dam removal, that is expected to result in some unavoidable short term water quality impacts in order to realize long term water quality and fish habitat (beneficial use) improvements. The proposed rule clarifies DEQ s intent and authority to provide a time schedule in the Section 401 certification, which will allow time for the project to comply with water quality standards, if certain findings are made. The proposed rule would require DEQ to protect water quality to the maximum extent practicable during dam removal. It is also intended to facilitate state concurrence by demonstrating a regulatory pathway to ensure water quality compliance, should the U.S. Secretary of Interior determine that the dam should be removed.

5 Draft Issue Paper: Klamath River Rulemaking 2 Objectives The objectives of the proposed rule are to protect water quality to the maximum extent practicable during removal of the J.C. Boyle Dam on the Klamath River, ensure that long term ecological benefits outweigh short term impacts, and that long term water quality improvements occur in a timely manner. The proposed rule facilitates DEQ s ability to include conditions in the Section 401 certification to ensure that these objectives are met. Process DEQ formed and consulted with a local advisory committee while developing these rules. The committee provided input on the options evaluation and the proposed rule language. The committee s scope did not include discussing dam removal or the specific water quality conditions to be included in a future Section 401 certification for the project. See Chapter 4 below for more information about the advisory committee discussions. DEQ also informed statewide environmental stakeholder groups about the rule development. DEQ had multiple discussions with neighboring states and EPA to learn about possible regulatory pathways to dam removal and to evaluate the options. DEQ sought to understand how California is addressing the regulatory issues and concurrence because the Klamath settlement includes dam removals in both Oregon and California. DEQ s recommended rule is consistent with California s proposed approach. This rulemaking used Oregon s standard public notice and comment process and provided a 45 day public comment period and a public hearing. Stakeholders could also attend the public advisory committee meetings, and follow DEQ s website updates.

6 Draft Issue Paper: Klamath River Rulemaking 3 Chapter 2. Approaches Used for Other Dam Removal Projects Several dam removal projects in Oregon, Washington and California have been completed or are in the process of developing regulatory approaches in order to achieve long-term river and fisheries restoration. The following is a summary of projects and approaches used to facilitate Section 401 certification. Powerdale Dam, Hood River, OR The Section 401 certification was based, among other things, on compliance with the water quality turbidity standard that allows limited duration exceedances. The project was not expected to cause other water quality standards exceedances. Marmot Dam, Sandy River, OR The Section 401 water quality certification relied on compliance with the turbidity and anti-degradation standards, and was not expected to cause other water quality standards exceedances. Elwah and Condit Dams, Washington - The Washington Department of Ecology used three approaches to facilitate Section 401 certification for these two projects: a habitat restoration provision (WAC A-300(3)), a short-term modification provision (WAC A- 410(3)), and an existing compliance schedule rule (WAC A-510). The Department of Ecology adopted the habitat restoration and short-term modification rules in 2003 to facilitate issuing section 401 certifications for the Elwha and Condit Dam removal projects. Ecology submitted these rules to EPA for review and approval. In 2007, EPA declined to take action on the habitat restoration provision, finding that the provision was not a "water quality standard" as defined under the Clean Water Act. In 2008, EPA declined to take action on the short-term modification provision for the same reason. EPA suggested in a subsequent communications that Washington could use the rule as "another appropriate requirement of state law" in Section 401 certifications. In 2005, EPA declined to take action on the compliance schedule rule as a water quality standard. Following this 10-year process, Ecology used the existing compliance schedule rule to issue Section 401 certification for the Condit project. Copco 1&2 and Iron Gate Dams, California North Coast Regional Water Quality Control Board The board is developing plan amendments to address aquatic system restoration and its role as a water quality protection tool. The proposed restoration policy includes: A definition of aquatic system restoration, New or revised prohibitions designed to support aquatic system restoration, Criteria for exempting certain aquatic system restoration projects from prohibitions and permitting temporary exceedances of certain water quality objectives, and Implementation guidelines for aquatic system restoration project construction and a strategy to coordinate the review and approval of such projects with other resource protection agencies.

7 Draft Issue Paper: Klamath River Rulemaking 4 As of the time of this document preparation, EPA Region 9 is not expected to regard California s proposed restoration policy as a water quality standard, which would obviate the need for EPA approval.

8 Draft Issue Paper: Klamath River Rulemaking 5 Chapter 3. Approaches Considered Introduction DEQ identified the following approaches for evaluating the removal of the J.C. Boyle Dam under Section 401 of the Clean Water Act: compliance schedules, variances or a project-specific restoration rule. DEQ s objective is to allow unavoidable limited-duration exceedances of some water quality standards during the dam removal process if we conclude that the project will result in long-term water quality and fish use benefits. Existing rules do not clearly address this circumstance. DEQ determined that a narrow, targeted rule would be the best regulatory path after considering whether the rule should apply to dam removal statewide. DEQ decided to develop the rule specifically for removal of the J.C. Boyle Dam for the following reasons: 1. A short timeline. The state expects to be asked to concur or not concur with the Secretarial Determination regarding removal of the dam in the spring or summer of 2012, or soon thereafter. A rule applicable statewide would require a more comprehensive effort including considerations for the variety of situations that could arise throughout the state. 2. A narrow application provides more certainty about the circumstances under which the provision will be applied and how it will work. Compliance Schedule Options 1. Use Existing Compliance Rules DEQ has an existing compliance schedule rule and other provisions that provide some implementation timing flexibility for certain sources and parameters: OAR (16) Compliance schedules. In a permit issued under OAR 340, division 045 or in a water quality certification under OAR 340, division 48, the department may include compliance schedules for the implementation of effluent limits derived from water quality criteria in this division. A compliance schedule in an NPDES permit is allowed only for water quality based effluent limits that are newly applicable to the permit and must comply with provisions in 40 CFR (including the requirement that water quality criteria must be achieved as soon as possible). OAR (12) (h) (B), in part, Implementation of the Temperature Criteria: Each plan must include a description of best management practices, measures, effluent trading, and control technologies (including eliminating the heat impact on the stream) that the nonpoint source intends to use to reduce its temperature effect, a monitoring plan, and a compliance schedule for undertaking each measure. OAR , in part, Turbidity Criteria:

9 Draft Issue Paper: Klamath River Rulemaking 6 Turbidity (Nephelometric Turbidity Units, NTU): No more than a ten percent cumulative increase in natural stream turbidities may be allowed, as measured relative to a control point immediately upstream of the turbidity causing activity. However, limited duration activities necessary to address an emergency or to accommodate essential dredging, construction or other legitimate activities and which cause the standard to be exceeded may be authorized provided all practicable turbidity control techniques have been applied and one of the following has been granted: 1. Emergency activities: Approval coordinated by the Department with the Oregon Department of Fish and Wildlife under conditions they may prescribe to accommodate response to emergencies or to protect public health and welfare. Advantages: Using the existing compliance rule has the following advantages: DEQ could interpret this rule to authorize the agency to certify the project with a compliance schedule or conditions in the certification related to temperature or turbidity. Would not require rulemaking. Disadvantages: Using the existing compliance rule has the following disadvantages: Potential argument that compliance schedules should not be used to allow water quality exceedances. OAR (16) most clearly applies to point sources in NPDES context; its application to nonpoint sources is unclear. Discharges during dam removal are not considered a point source and will not likely require an NPDES permit. The project is expected to have short term water quality standards exceedances for parameters other than temperature or turbidity that are not specifically addressed by current rules. 2. Amend Rules to Allow Compliance Schedule for Klamath Dam Removal 401 Certification DEQ also considered amending the existing compliance schedule rule to clarify that a compliance schedule could be included in a Section 401 certification for the Klamath River dam removal. The existing compliance schedule rule clearly authorizes the use of compliance schedules for NPDES permits. Under this option the rules would be amended to clarify that a compliance schedule could also be used in Section 401 certifications for dam removal projects and that they would include specific conditions and requirements, work schedule, milestones and date when water quality standards will be met. These conditions and requirements, as part of the Section 401 certification, would become conditions of the federal permit regulating the dam removal (e.g. U.S. Army Corps of Engineers permit issued under the Clean Water Act Section 404). The evaluation and conditions of the Section 401 certification for removal of the J.C. Boyle Dam would include: The time period during which water quality standards may be exceeded and a description of the expected exceedances A demonstration of the net ecological benefit Conditions specifying any additional actions the project will take to minimize the spatial and temporal adverse impacts to water quality, threatened and endangered species, and beneficial uses Reasonable assurance that water quality standards will be met by the end of the compliance schedule

10 Draft Issue Paper: Klamath River Rulemaking 7 Advantages: The rule would apply to a range of restoration or dam removal projects. Disadvantages: Recent litigation has challenged DEQ s use of compliance schedules in NPDES permits. DEQ entered into an agreement with the litigants and developed guidance regarding the implementation of compliance schedules in NPDES permits. Revising the existing compliance schedule was not anticipated in the compliance schedule settlement agreement discussions. Using the term compliance schedule and trying to include the concept for 401 certifications in the same rule could create confusion. While the general purpose is the same, the procedures and findings for implementing the provision in a 401 would be somewhat different than they are for NPDES permits. While EPA approved DEQ s compliance schedule rule for NPDES permits as a water quality standard, EPA does not consider a time schedule rule for 401 certifications to be a water quality standard that they would need to approve. Variance Rule Options DEQ may grant variances to point sources for one of six criteria specified in both federal and state water quality standards regulations. Because the dam removal project is not a permitted point source and because none of the six criteria for allowing a variance clearly fit the dam removal circumstance, DEQ concludes that the agency should not rely on the state s existing variance rule to certify the Klamath dam removal. DEQ considered the following options to allow a variance to be used for a dam removal certification: Amend the existing variance rule Adopt a Klamath-specific variance rule 1. Amend the Existing Variance Authorizing Rule DEQ considered how the existing rule could be expanded to apply to a dam removal project, which is considered a nonpoint source and requires a Section 401 certification rather than an NPDES permit. The amendments would need to authorize DEQ to grant variances for nonpermitted sources and include restoration as a reason to justify a variance, based on a finding that the project will cause unavoidable short term standards exceedances, but will result in long term water quality and use protection improvements. Under this option, the variance for the Klamath dam removal project would be granted through a second, separate action at the time of Section 401 certification and would require EPA approval. Advantages: DEQ would expect EPA to review the proposed rule as a water quality standard and the rule may apply to other restoration projects. Disadvantages: If DEQ pursued expanding the existing variance provision to include nonpoint restoration projects requiring a Section 401 certification, EPA would likely need to approve both the amended rule and the project-specific variance. This approval process

11 Draft Issue Paper: Klamath River Rulemaking 8 would extend considerably the timeline and introduce additional uncertainty to the dam removal administrative process. The amended variance rule would require EPA approval for dam removal, which would expand EPA s role in the Section 401 certification process, which is the state s authority. 2. Adopt a Water Body Variance or Temporary Standard DEQ considered whether a variance would be the appropriate regulatory tool for dam removal. However, this approach would require two rulemakings. First, DEQ would need to revise the variance procedures rule to clarify that variances can be granted for dam removal. Then, a second rulemaking would be required at the time of project certification to adopt a Klamath dam removal variance that specifies the requirements and conditions for the project. Both rules would require EPA approval. DEQ also considered the option of identifying a temporary standard for the Klamath River. DEQ would specify a limited time period, during which the underlying beneficial uses and water quality standards would be unattainable and temporary standards would be applicable. This approach requires a justification as to why the current standards are not expected to be attainable during this time and a description of why the temporary uses and criteria are the best that will be attainable. Advantages: Provides a project-specific variance or temporary standards for all affected parameters. Requires one rulemaking. Disadvantages: A water body variance or temporary standard would require EPA approval, which would add significant time to the process. This option may require more specific and quantitative information on the nature and duration of water quality standards exceedances at the time of the rulemaking, which is not likely to be available in the near term. In the absence of this information, additional DEQ action and EPA oversight may be required at the time of certification. This would add costs and even more importantly, unacceptable uncertainty. The information needed to support such an approach has not been developed, including a decision by the Secretary of the Interior that the dam removal should occur. As such, this approach could be premature. Klamath-Specific Restoration Rule This option is a project-specific restoration rule that states DEQ s authority and procedures for including a time schedule in a future water quality certification for the removal of the J.C. Boyle Dam. The schedule would provide time for the project to comply with water quality standards following the removal of the J.C. Boyle Dam and would clarify that DEQ could issue a 401certification notwithstanding temporary water quality standards exceedances under the following conditions:

12 Draft Issue Paper: Klamath River Rulemaking 9 The expected exceedances will be for a limited duration The project will provide net ecological benefits The project minimizes adverse impacts, to the maximum extent practicable, to water quality, threatened and endangered species and beneficial uses The project will not cause water quality exceedances past the end of the predetermined duration Conditions will be placed in the Section 401 certification. Advantages: Authorizes DEQ to certify the project under section 401 and place conditions in the certification to minimize temporal and spatial water quality impacts during the process of dam removal in order to ensure timely recovery of water quality and use protection following removal. Provides the regulatory tool DEQ needs to ensure that the project will meet Oregon s water quality standards and to minimize water quality impacts from the project. Would be administratively efficient and relatively low cost for DEQ because the rule would be adopted in 2012 and would then be implemented through the Section 401 certification. This provision will not require EPA approval. This approach will allow DEQ to complete the rulemaking in the near term prior to state concurrence on the project. Disadvantages: This rule is not expected to be considered a water quality standard by EPA as defined by the Clean Water Act, and as such, does not require EPA approval. DEQ s 401 certification would have a stronger basis if it was based on a regulatory provision considered to be a water quality standard and approved as such.

13 Draft Issue Paper: Klamath River Rulemaking 10 Chapter 4. Summary of Advisory Committee Discussion DEQ formed a local advisory committee that met three times, May 16, June 7, and Aug. 31, 2011, to discuss rulemaking objectives, options and draft rule language. The committee membership is shown in the table below. The committee input on technical and policy issues is summarized below. Member Dennis Linthicum Ted Wise Ron Larson Renee Snyder Jason Cameron Erica Terence Glen Spain Larry Dunsmoor Representing Klamath County Board of Commissioners Oregon Dept. of Fish and Wildlife U.S. Fish and Wildlife Service U.S. Bureau of Land Management U.S. Bureau of Reclamation Klamath Riverkeeper Pacific Coast Federation of Fishermen s Associations Klamath Tribes Technical Issues The committee discussed several technical issues relevant to the KHSA and future decisions that will be made regarding the removal of the dam and DEQ s issuance of the Section 401 certification, if needed. DEQ and the advisory committee considered these issues as part of their evaluation of the rulemaking options. The draft Environmental Impact Report/Environmental Impact Statement for estimating water quality impacts of removing the J.C. Boyle Dam was released for public comment after the advisory committee adjourned. The Section 401 application process with a final detailed plan for removal will be completed only after a decision has been made to remove the J.C. Boyle Dam. The technical issues will have to be evaluated during the Section 401 certification process. This rule does not preclude any technical evaluation but just specifies the findings that DEQ must make at the time of Section 401 certification. Committee members generally agreed with the DEQ s stated objective to allow short term impacts in order to facilitate restoration and achieve long term river improvements. Committee members generally agreed with the objective of minimizing water quality impacts during the dam removal process to the maximum extent practical. Policy Issues Policy issues considered and discussed by the advisory committee included:

14 Draft Issue Paper: Klamath River Rulemaking 11 The KHSA, which includes provisions for the potential removal of the J.C. Boyle Dam, is a contentious issue in the Klamath Basin. Siskiyou County is strongly opposed to the proposed removal of the four dams on the Klamath River. The Dam Removal Entity should experience efficiencies as a result of this rulemaking since it will facilitate the administrative process. The governor supports the KHSA and may need to rely on the rulemaking as part of the state concurrence. DEQ is not responsible for deciding whether or not to remove the dams. Rather, DEQ s rulemaking is focused on how to protect water quality to the extent feasible through the Section 401 certification process and ensure that short term water quality impacts do not present an obstacle to dam removal, if that is the ultimate decision. DEQ should make a finding whether the long term benefits outweigh the short term impacts when evaluating the certification.

15 Draft Issue Paper: Klamath River Rulemaking 12 Chapter 5. Recommendation Summary of DEQ Recommendation Based on a review of the available approaches and input from the advisory committee, other states and EPA, DEQ recommends adoption of a Klamath-specific restoration rule that clearly allows DEQ to include a time schedule in the 401 certification if certain findings are made (as described in section 3). The purpose of the time schedule is to provide time for recovery of water quality impacts associated with dam removal activities at the J.C. Boyle Dam. The proposed rule requires that dam removal activities will not cause a violation of a water quality standard beyond the end of the period for meeting standards that DEQ would specify in the time schedule and include in the Section 401 water quality certification. In addition, the rule specifies the findings that DEQ must make in order to allow the time schedule and certify the dam removal as a restoration project. DEQ will only use this rule if the Secretary of the Interior decides that the J.C. Boyle Dam should be removed pursuant to the KHSA. Proposed Rule Basin-Specific Criteria (Klamath) Water Quality Standards and Policies for this Basin (5) Time Schedule for Dam Removal. (a) DEQ may issue a 401 Water Quality Certification for the federal license or permit authorizing the removal of J.C. Boyle Dam on the Klamath River that includes a time schedule for compliance with water quality standards, if DEQ makes the following findings: (A) The dam removal and its associated water quality impacts will be of limited duration; (B) The dam removal and related restoration activities will provide a net ecological benefit; (C) The dam removal will be performed in a manner minimizing, to the maximum extent practicable, adverse impacts to water quality, threatened and endangered species, and beneficial uses of the Klamath River; and (D) The dam removal, by the end of a specified time schedule, is not expected to cause an exceedance of a water quality standard set forth in this Division. (b) Any 401 Water Quality Certification issued by DEQ for removal of J.C. Boyle Dam must: (A) Be based on an application, evaluation, and public participation complying with OAR Chapter 340 Division 48; and

16 Draft Issue Paper: Klamath River Rulemaking 13 (B) Contain conditions ensuring that the dam removal: (i) will be performed in accordance with interim milestones and a time schedule specified in the certification; (ii) will be performed in a manner that, to the maximum practicable extent, minimizes adverse impacts to water quality, threatened and endangered species, and beneficial uses of the Klamath River (including the use of best practices and interim and post-removal protection, mitigation, and monitoring measures); and (iii) will not cause an exceedance of a water quality standard set forth in this Division by the end of the maximum period for meeting standards specified in the certification. Stat. Auth.: ORS , 468B.030, 468B.035 & 468B.048 Stats. Implemented: ORS 468B.030, 468B.035 & 468B.048 Hist.: DEQ , f. & cert. ef ; DEQ , f. & cert. ef

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